In Croatia, more than 50 percent of the 1.6m registered vehicles in 2006 are manufactured before the year 1999. The vast majority of them have gasoline powered engines which are designed specifically for lower-quality fuels with a high sulphur content not covering euro, the gasoline Super 95 and Super plus 98 standards. There are no exact data on passenger vehicles but the share of alternative fuelled vehicles is considered with less than 0.1% (in Croatia there is currently one refuelling station publicly accessible with green fuel/CNG). A reasonable share of passenger vehicles is fuelled with LPG but this is still less than 10%.

In 2006 there were about 9,400 good vehicles registered in Croatia on which about half with a tonnage of more than 12 tonnes. About 23% of these vehicles have Euro 3 and more standard, 31% Euro 2, 3% Euro 1 and about 43% no standard (so called black vehicles). There is a slightly increasing market share of good vehicles with Euro 3 and more during the years.

There are several initiatives introducing clean vehicles in urban public bus transport. For example in June 2007 Zagrebacki Elektricni Tramvaj (ZET), the major transit authority responsible for public transport in Zagreb began the first phase of a low carbon fuel project that aims to replace the entire fleet with biodiesel buses. ZET has over 300 buses along 127 routes, 73 of which are urban and 54 are suburban. It is hoped that successful use of biofuels in this instance will demonstrate to other public transport operators in neighbouring regions (within the EU and those that are future candidate countries) that it is a practical and sustainable option to pursue. Additional assistance for this investment was provided through the CIVITAS-ELAN programme. ZET’s biodiesel initiative is running in parallel with the company’s replacement of most of its existing fleet of buses by 214 new models manufactured by MAN, Mercedes-Benz and Irisbus Citelis buses that conform to the Euro 5 emission standard. The Zagreb-based Institute for Energy and Environment Protection has conduced a project named "Introduction of biodiesel in Zagreb public transportation". These researches have shown that the city of Zagreb annually "produces" more than 1,400.000 litres of scrap edible oil in the city's hotels, restaurants and other facilities, along with 1,600.000 litres from households. The quantity of biodiesel manufactured from such scrap edible oil is sufficient for 80 city buses per year.

In Croatia there are a few small scale initiatives to establish electric vehicle technology. For example a company called Dok-Ing has developed the XD car concept. The XD will carry up to three people over a range of 145 miles at city speeds and can be charged on a typical outlet or via fast charging, where filling up will growing shorter as one hour.

The geo-information system European Environmental Atlas (technologies.ewindows.eu.org/atlas_map) shows a densed network of LPG refuelling stations (154) in Croatia (the web information systems www.poiplaza.com/index.php_ shows 201). No refuelling stations are listed for biodiesel, E85 flexifuel and hydrogen (cross checked by various sources). The geo-information system www.metanoauto.com/modules.php list one refuelling station for biogas (methane, CNG) gas in Zagreb.

In Croatia there is a uniform VAT of 23% on the purchase of vehicles. There is a special tax/excise duty on passenger cars, motorcycles, boats and planes - on sales in the country. The tax basis is the retail price of passenger cars, motorcycles, boats and aircraft (without VAT). No environmental element is included. Furthermore, there is a country uniform circulation tax system for all legal and natural persons registered owners of passenger cars and motorcycles. Passenger cars (up to 10 years old) and motorcycles according to engine power expressed in kW and ages of vehicles. The tax which has to be paid annually ranges between 200 EUR and 1,500 EUR but again does include any direct environmental component (a report from IEE shows for 2004 that the Croatian car circulation tax include environmental elements but under the 2010 tax regime no evidence was found for this).

The Croatian Environmental Protection and Energy Efficiency Fund is a structured extra-budgetary fund which has been established by the Act on Environmental Protection and Energy Efficiency Fund on July 1st 2003 (OG No. 107/03). The Basic areas were environmental protection, energy efficiency and renewable energy sources as well as collecting fees for the charge on sulphur, NOx and CO2 emissions or special environmental charge levied on motor vehicles. Nowadays, it is understood that the role of the fund is reduced to providing guidelines i.e. on scrapping old vehicles as well as providing funds to specific environmental projects.

Funding

The so called Green for Growth Fund Southeast Europe was initiated by the European Investment Bank and KfW, the German Development Bank (nowadays also some sources of the IFC are included) to stimulate financing of sustainable energy projects within the region. The fund will have a significant developmental impact in promoting energy efficiency and renewable energy and expanding lending to households, small and medium enterprises, renewable energy projects, energy service companies, and municipalities. It also covers the purchase of new vehicles for public transport. The fund is managed by Oppenheim Asset Management Services, part of Sal. Oppenheim, a leading private banking and asset management group in Europe, in consortium with the fund advisor, Finance in Motion.

In Croatia the EU structural funds with the priorities promoting energy and resource efficiency also can be used for financing the replacement of old public transport vehicle stock by clean vehicles. There is a maximum co-financing rate between 75-85%.

Regulation

In 2006 the Croatian Government's Decree on quality of biofuels introducing liability for Croatia was set up to introduce 5.75% of biofuel in overall consumption of fuel in Croatia by the end of 2010. The fundamental Croatian legislation for biodiesel (producing, transport), recycling and collecting of used cooking oil is:

Energy Act (OG No. 68/01, 177/04, 76/07, 152/08)

Biofuels for Transport Act (OG No. 65/09)

Waste Act (OG No. 178/04, 111/06, 60/08)

Air Protection Act (OG No. 48/95, 178/04, 60/08)

Island Act (OG No. 34/99, 149/99, 32/02, 33/06)

Biofuels for the Transport Act regulate the production, trade and storage of biofuels and other renewable fuels, the use of biofuels in transport, the adoption of programs and plans to encourage production and the use of biofuels in transport, the power and responsibility for implementing policies to encourage production and the use of biofuels in transport and measures to encourage production and the use of biofuels in transport.

Since 2006 lead fuel is banned in Croatia. In May 2006 a new regulation was set up defining a. maximum amount of 10 gr/litre for sulphur, for diesel and petrol in accordance with EU standards.

The Republic of Croatia is currently preparing for the accession to the EU. It will therefore need to harmonize its public procurement practices with those in the EU as well as align its national legislation with the so-called acquis communautaire. In order to achieve these goals the Public Procurement Office has been conducting a CARDS Twinning Project "Strengthening the Croatian Public Procurement System" with its twinning partner – a consortium of German and Slovenian consultants.

In Croatia public procurement is carried out in a decentralised manner by different public organisations. There is a national procurement platform www.javnanabava.hr/defaulteng.aspx operated by the Public Procurement Office. However, the system only collects and publishes different tenders (including vehicles) in a consolidated manner but without providing a facility for common or joint procurement.

Art. 58 (1) a) (contract award criteria) as well as Art. 70 (2) of the Croatian Public Procurement Act (OG 110/07, 125/08) defines in general terms that public intuitions can apply environmental criteria in the public procurement.

There are published a so-called Public Procurement Manual for clients (procuring institutions) by the Public Procurement Office for product groups that are the subject of procurement by the central authority including vehicles. No specific reference is made however to the application of environmental criteria for the procurement of these product categories.